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Research In Motion stock regains upward momentum following Q3 report

It didn&rsquo;t come in time for Christmas, but Santa still managed to bring a rally for long-suffering Research In Motion Ltd. investors this week.

Comments last week from Research in Motion President and Chief Executive Officer Thorsten Heins about services revenue may have been taken out of context according to one analyst.
REUTERS/Mike Cassese (MIKE CASSESE / REUTERS)

By Madhavi Acharya-Tom YewBusiness Reporter

Thu., Dec. 27, 2012

It didn’t come in time for Christmas, but Santa still managed to bring a rally for long-suffering Research In Motion Ltd. investors this week.

Shares of the Waterloo-based technology firm moved up in early trading Thursday after a pre-holiday slump for the BlackBerry maker's stock.

The stock closed at $11.70 in Toronto, up $1.20 from Monday’s close before a two-day holiday for Christmas and Boxing Day.

The shares touched an intraday high of $12.06 on Thursday.

RIM shares had gained ground Wednesday on U.S. markets while the Toronto Stock Exchange was closed and the TSX followed Nasdaq's lead on Thursday.

In New York, RIM shares continued move higher, adding about 18 cents or nearly two per cent from the Wednesday close.

The company reported a smaller-than-expected quarterly loss last week, but executives also raised concerns about declining service fees.

Chief executive officer Thorsten Heins said that lower-end user will generate “less or no service revenue” in the future, a move that affects RIM”s most profitable source of revenue.

In response, the stock plunged about 25 per cent last week.

The stock had been on a roll during December on rising optimism about the new BlackBerry 10 lineup which is being launched at the end of January.

Investors may have overestimated the impact of the change on earnings per share, Kevin Smithen, an analyst at Macquarie Securities USA Inc. in New York told Bloomberg.

“We believe that CEO Heins’ comments on changes to service plans were taken out of conext and the EPS impact from those changes is not as great as the Street is fearing,” he said in an email. “The stock was largely oversold post-earnings report.”

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